John Harpole, founder and president of Littleton, Colorado-based Mercator Energy, addressing last week’s annual CO2/ROZ Conference at the Horseshoe, told his audience that OPEC countries “don’t understand capitalism or property rights. They don’t understand what we’re doing.”

John Harpole, founder and president of Littleton, Colorado-based Mercator Energy, addressing last week’s annual CO2/ROZ Conference at the Horseshoe, told his audience that OPEC countries “don’t understand capitalism or property rights. They don’t understand what we’re doing.”

State-owned oil companies are playing a long-term game, he said, while American shale producers are playing a short-term investment cycle game, Harpole said.

“I don’t think OPEC understands that business model. They don’t understand capitalism or fee ownership. And how to you explain George Mitchell and his persistence?” he said, referring to the founder of Mitchell Energy, who found a way to utilize hydraulic fracturing to crack open shale rocks.

The efficiencies that have been gained in the last few years were unimaginable just 10 years ago, he said. “Having to report to your shareholders every week, every day, how efficient you are, has driven efficiency. State-owned companies don’t grasp that,” he said.

The nation’s shale revolution is building an economic backbone that provides the nation with energy security that will let it withstand the threat of being cut off from Middle Eastern oil, Harpole said.

The United States is forecast to exit 2018 producing 9.6 million barrels of oil per day, he said. From 2009 to 2014, 55 percent of the growth in petroleum and natural gas liquids came from the United States.

Harpole went on to discuss uncertainties facing the industry, including the threat of a war with North Korea and how that could impact U.S. exports to that region. He said 10 percent of South Korea’s liquefied natural gas comes from Cheniere Energy’s Sabine Pass facility.

Other uncertainties are the unrest in Venezuela; what would happen in a face-off between Saudi Arabia and Iran; and the battle between China, Japan and the Philippines over the South China Sea. He said a third of the world’s crude and more than half of its LNG come through the South China Sea.

The growth in U.S. crude and natural gas production has the country “poised to meet any decline in worldwide production for the foreseeable future,” Harpole said.

In the meantime, “efficiency, efficiency, efficiency” is driving growth in domestic oil field activity, he said. Half of the drilling rigs that have been put to work have been added in the Permian Basin, “but there are sweet spots in other basins,” Harpole said.